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*************Figure 1: Effect of RER change in vote share*********************** 
*************Panel A: full sample (based on Table 1, model 6)*******************
*************Panel B: OECD nations (based on Table 2, model 2)******************
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use "voting exchange rate data 15 July 2023.dta", clear 
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xtset ifscode year

**Variable Labeling**
label var cap100 "Capital"
label var cur100 "Current"
label var underval "Exchange Rate Undervaluation"
label var wbcode "World Bank Country Code"
label var underval91 "Exchange Rate Unvervaluation_91"
label var lgrow9 "Log Growth"
label var balance9 "Trade/GDP Trade Balance"
label var popgr9 "Population Growth (mean)"
label var trade_gdp "Trade/GDP"
label var inflation "Inflation (mean)" 
label var unemployment_ilo_est "Unemployment ILO Estimate (mean)"
label var unemployment_nat_est "Unemployment National Estimate (mean)"
label var cap100 "Capital Account"
label var fh_civ "Civil Liberties Rating (Freedom House)"
label var fh_pol "Political Rights Rating"
label var lvau "De Jure and De Facto Central Bank Independence Index unweighted"
label var lvaw "De Jure and De Facto Central Bank Independence Index weighted"
label var oil_rents "Oil Rents"
label var polcomp "Political Competition (mean)"
label var resource_rents "Resource Rents"
label var pr "Proportional Representation"
label var EU "European Union membership"
label var year "Year"
label var banking_center "Banking Center"
label var monetary_union "Monetary Union"
label var lgrow9 "Log Growth"
label var lnrealgdp9 "Log Income PC"
label var polity2 "Polity 2"
label var balance9 "Trade Balance/GDP"
label var exchangerateregime_fine "Exchange Rate Regime Rheinart and Rogoff (Fine classification)"
label var peg "Standard Shambaugh 2004 classification (1= peg,0= nonpeg) (Shambaugh)"
label var ifscode "International Financial Statistics Database Country Code"
label var ifs "International Financial Statistics Database Country"
label var polcomp "Political Competition Concept"
label var ltrade9 "Log Trade Openess (mean)"
label var cowcode "Country Codes according to the Correlates of War Project"
label var oecd "OECD membership"
label var GEO "Continent"
label var polity4 "Polity 4"
label var exchangerateregime_coarse "Exchange Rate Regime (Coarse Classification)"
label var unemploymerge "Unemployment Merge"
label var linvest9 "Log Investment"
label var linflation "Lag Inflation"
label var l2underval "Lag 2 Undervaluation"
label var l2underval91 "Lag 2 Undervaluation91"
label var Inct2019 "Incumbent Vote Share"
label var Inct12019 "Incumbent Vote Share 1"
label var Inct22019 "Incumbent Vote Share 2"
label var l2undervalreg91 "Lag_2 Exchange Rate Undervaluation"


ssc install interflex, replace all
ssc install reghdfe
ssc install ftools

xtset ifscode year, delta(1)


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xtset ifscode year, delta(1)

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eststo clear

****Table 1 Model 6. Unit/Year FE - Allow for changes to interact with levels **
eststo: xtreg dInct2019 i.year    c.l.d.underval91##c.l2.underval91 l.peg_no_euro l.lgrow9 l.balance9 l.trade_gdp l.inflation l.unemploymerge  l.euro maj_01 if banking_center!=1 & polity>6, fe vce(cluster ifscode)


*** Figure 1 Panel A: Effect of RER change in vote share - Table 1, Model 6 ***
margins, dydx(l.d.underval91 ) at(l2.underval91 =(-1 (.1).7))
marginsplot, title("Change in Real FXR's Effect on Change in Incumbent Vote Share") ytitle("Avg Marginal Effect of ΔεXRi,t-1 on Vote Shares") xtitle("Currency Valuation at t-2 (negative values equal overvaluation)") yline(0) recastci(rline) ciopts(lpattern(shortdash)) recast(line)  legend(off) addplot( hist l2underval91 if e(sample) , width(.05) percent mfcolor(none) fcolor(none) lcolor(gs10) yaxis(2) yscale(alt axis(2)) xscale(range(-1 .7)) xlabel(-1(.1).7) ) graphregion(color(white)) bgcolor(white)
graph export Fig_1_Panel_A.png, as(png) name("Graph") replace

eststo clear

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eststo clear

****Table 2 Model 2. Unit/Year FE - Allow for changes to interact with levels **
eststo: xtreg dInct2019 i.year    c.l.d.underval91##c.l2.underval91 l.peg_no_euro l.lgrow9 l.balance9 l.trade_gdp l.inflation l.unemploymerge l.euro maj_01 if banking_center!=1 & polity>6 & oecd==1, fe vce(cluster ifscode)


*** Figure 1 Panel B: Effect of RER change in vote share - Table 2, Model 2 ***
margins, dydx(l.d.underval91 ) at(l2.underval91 =(-1(.1) .7)  )
marginsplot, title("Change in Real FXR's Effect on Change in Inc. Vote Share - OECD") ytitle("Avg Marginal Effect of ΔεXRi,t-1 on Vote Shares") xtitle("Currency Valuation at t-2 (negative values equal overvaluation)") yline(0) recastci(rline) ciopts(lpattern(shortdash)) recast(line)  legend(off) addplot( hist l2underval91 if e(sample) , width(.05) percent mfcolor(none) fcolor(none) lcolor(gs10) yaxis(2) yscale(alt axis(2)) xscale(range(-1 .7)) xlabel(-1(.1).7) ) graphregion(color(white)) bgcolor(white)
graph export Fig_1_Panel_B.png, as(png) name("Graph") replace
